Hereford United Football Club

11th
September 2014

Jesse Norman’s House of Commons speech.

You do not have to be a football supporter to know how important this game is to the people of Great Britain. Every week during the season hundreds of thousands of people turn out to watch premiership and football league games, and millions more watch at home or catch up with the highlights. Football is the lifeblood of many of our towns and cities: it is what parents and kids do on a Saturday afternoon; and it is the subject of endless banter and gossip during the week. But the premiership and the football league are just the glamour at the top. There is huge activity below the surface, in non-league and grass-roots football. It is very easy to forget the significance of those parts of the game, and the roles those clubs play in the community and their importance in seeding the players and supporters of tomorrow.

That carries with it a crucial point: football clubs are not purely private organisations. They are not merely the private playthings of their owners – they are public as well.

In large part I have called this debate to focus public attention on what has happened at Hereford United, which has been the result of a disastrous catalogue of mismanagement and poor regulation. We will come to that, but first I want to look to the good. In Herefordshire, despite many competing sports and other outdoor activities, the high cost of coaching and a shortage of access to good pitches, the non-league and grass-roots game is flourishing. We have 42 grass-roots senior football teams, some 150 junior teams, a schools league and midweek leisure games. Every weekend during the season about 2,000 youngsters between the ages of nine and 16 turn out in teams such as Ross Juniors in Ross-on-Wye and Pegasus Juniors in Hereford. Over the summer some 78 girls took part in girls week football, and I had the privilege of barbecuing several hundredweight of sausages for the different nationalities' teams in the first Herefordshire world cup in July.

Much of that good news has been cast into the shadows by events at Hereford United, which have been a catastrophe for the club, for the city, for the county and for Bulls fans everywhere. This debate has special significance for Herefordians, because the terrible truth is that our club, my club, Hereford United – the club of Ronnie Radford and what has been described as the most famous goal in FA Cup history, against Newcastle United – the goal that launched the career of John Motson – is likely to go into insolvency next Monday, with a court judgment on its outstanding debts.

How did that occur? How has a club that was solvent and competitive three years ago suddenly found itself on the brink of annihilation? It is a long and tortuous saga, which I will not recount here, but let me tell the House that Hereford United stand as a case study in mismanagement and poor regulation, of a kind all too prevalent in lower league and non-league football.

In 2008-09 Hereford United were playing in league one against teams such as Leicester City, now in the Premier League, and Leeds United, currently in the Championship. They were relegated to League Two in 2009 and to the Football Conference in 2012. That is when the financial problems began to bite. Their share of rights income dropped from £750,000 a year to a tiny £50,000. That was offset by a parachute payment of £215,000, much less even than one year's drop in rights income, much of which will have been returned to clubs in the league and to the FA itself.

The 2013-14 season was beset by financial crises but the fans rallied, funds were raised to see off the threat of a series of winding-up petitions. However, in June, Mr Thomas Agombar became the 57 per cent owner of Hereford United. When he arrived at the club, he reassured staff that "all payments and wages due to themselves, players and football creditors would be paid in full this week, subject to Conference status".

Despite those promises and the deadline for payment being extended three times, Hereford United failed to pay their football creditors and failed to post the bond as required under conference rules. They were then expelled from the conference on June 10, 2014. That created, indeed reinforced, the strong impression locally that Mr Agombar was less interested in football than in taking over leases to the Edgar Street ground and using them for commercial development.

There was also immediate local concern about the suitability of Mr Agombar to own a football club, not least because he has convictions for conspiracy to steal and theft. Furthermore, two other directors appeared likely to fail the FA's owners and directors test. One, Mr Philip Gambrill, was subject to an individual voluntary arrangement and another, Mr Thomas Agombar Jr, had been banned by Essex County FA.

I wrote to the Football Association in early June, asking it to consider whether Mr Agombar met the requirements of the owners and directors fit and proper test. However, perhaps because of the World Cup, it was difficult to get a rapid response. Indeed it was not until August 4, some six weeks later, that the FA finally confirmed to me that Mr Agombar Sr had failed the test, along with Mr Agombar Jr and Mr Gambrill. Even then, despite my repeated requests and warning of the reputational risks to the FA itself, the FA refused publicly to announce the results of the test. It pleaded confidentiality, although the club was even then in negotiations over a company voluntary agreement, with Mr Gambrill's name on the CVA document. It took until August 12 for news that Mr Agombar and those two other directors had failed the test to be made public.

This whole fiasco raises very serious issues about governance and the need for greater transparency. I would encourage the Select Committee on Culture, Media and Sport to revisit in the next Parliament its 2011 report on football governance to reconsider some of the issues.

Today, I want to focus on the FA's fit and proper test and how that was administered. How could it be right for the FA to refuse to publish the results, which were clearly material to a proceeding in court?

Moreover, how can people who buy shares in football clubs be able to register their directorship with Companies House when they have not passed the test? Surely people who would be likely to fail the test should not be allowed even to get to that stage. The FA, Her Majesty's Revenue and Customs and Companies House should work much more closely to identify potentially unsuitable club shareholders, owners and directors as soon as they appear.

Ian Lucas (Wrexham) (Lab)

I have listened closely to the hon. Gentleman's excellent speech. Wrexham has had similar experiences, and the club has gone through a very difficult period. I am interested in what he has said, and he has come to the nub of the matter. Regulation must precede ownership. The key decision on whether someone is a fit and proper person must be made by the FA before it sanctions any transfer in ownership.

Jesse Norman

I thank the hon. Gentleman for that intervention. He makes a proposal that has been scouted before but needs to be examined more closely. There is a tie-in to a wider question: should there be a licensing regime for clubs? That is worth exploring.

As my hon. Friend knows, it is likely that many of the creditors, including football creditors, at Hereford United will never be paid.

He raises a serious issue. I am not by any means critical of the FA as such; I think that many of the things it does are good. There is a specific issue in relation to the owners and directors test that I want to focus on.

Serious concerns exist in that regard.

George Howarth (Knowsley) (Lab)

Mr Peter Kneale, company secretary of Prescot Cables in my constituency, has contacted me to make three suggestions. I would be interested in the hon. Gentleman's response to them. The first is that admission to non-league matches below conference level should be exempt from VAT. The second is that non-league clubs could automatically be given exemption from the business rate. The third is that the Government look at giving greater flexibility to the community amateur sports clubs scheme to help clubs.

Jesse Norman

As a member of the Treasury Committee, I am a bit leery of exemptions from VAT because I know how hard it is to recover those funds elsewhere and the precedent that they tend to set. On the issue of business rates, this is a local issue and councils should be encouraged to look closely at questions as they specifically arise. On the final issue, anything that the Government can do to support and enhance community ownership of supporter-led clubs would be valuable. As I have said, the FA, HM Revenue and Customs and Companies House should work much more closely to identify potentially unsuitable club shareholders, owners and directors as soon as they appear. Incredible as it sounds, as we debate today, Mr Andrew Lonsdale, a long-time associate of Mr Agombar, is the chairman of Hereford United, despite a criminal conviction in 2008 and despite being disqualified at Companies House from 2006 to 2012.

Ian Mearns (Gateshead) (Lab)

As a Newcastle and a Gateshead fan, I remember those ventures in the past with some pain. Because of the lack of oversight and transparency that the hon. Gentleman is in essence saying the FA has demonstrated, does he not think the FA itself is guilty of bringing the game into disrepute?

Jesse Norman

Will the Minister write to the Football Association and other relevant authorities, requesting that they investigate the rules which may have been contravened by Hereford United, and how Hereford United was allowed entry into the Southern League without Mr Agombar passing the owner and directors test and despite its failure to pay its football creditors, and whether Mr Andrew Lonsdale's continued role as club chairman is in contravention of existing rules? Hereford United's situation has been a tragedy for everyone who loves the club, but there might be some small comfort for fans if it now leads to genuine and sustained improvements in the non-league game.